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For the standard automatic-enrolment calculation in the UK, workplace pensions require a minimum total contribution of 8% of qualifying earnings: at least 3% from the employer and 5% from the employee. In 2026/27, qualifying earnings usually mean the slice of pay between £6,240 and £50,270 a year, rather than every pound of salary. Your scheme may use a different pensionable-pay definition or higher rates, so check its rules and payroll statement.
The statutory minimum at a glance
The 8% minimum has applied since April 2019. Under the standard qualifying-earnings basis, the employer must pay at least 3% and the employee supplies the remaining 5%. An employer can pay more than 3%, and a scheme can require more than 8% overall.
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| Item | 2026/27 standard figure | What it means |
|---|---|---|
| Total minimum contribution | 8% of qualifying earnings | Combined employer and employee contribution |
| Employer minimum | 3% | The employer’s statutory share; it may choose to pay more |
| Employee share | 5% | The standard staff share, with tax relief handled according to the scheme’s method |
| Annual qualifying-earnings band | £6,240 to £50,270 | The band used by most automatic-enrolment schemes |
| Monthly equivalent | £520 to £4,189 | The corresponding monthly band |
| Weekly equivalent | £120 to £967 | The corresponding weekly band |
The band is reviewed for later tax years. These figures apply to 2026/27 and should not be carried forward automatically into a subsequent year.
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Qualifying earnings are an earnings slice, not necessarily your gross pay. Payroll first applies the scheme’s assessment period and the relevant lower and upper limits, then applies the contribution percentages to the result. For example, pay below £6,240 does not enter the annual slice, while pay above £50,270 does not increase the slice under this standard basis.
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Pay that can be included
Regulator and government guidance lists salary or wages, commission, bonuses and overtime among pay that can count. Specified statutory payments, including statutory sick, maternity, paternity and adoption pay, can also be relevant. The exact treatment depends on the pension scheme’s rules and payroll basis, so compare your payslip with the scheme’s definition of pensionable pay rather than assuming that basic salary is the only input.
Qualifying earnings versus pensionable pay
Some schemes use qualifying earnings for the statutory minimum. Others define pensionable pay differently, such as a broader salary base or an occupational definition set out in the scheme rules. A scheme may therefore produce a contribution higher or lower than a simple calculation based on all gross pay, while still meeting its legal obligations. Ask the employer or provider which definition is being used and whether the displayed employee percentage includes tax relief.
How to calculate the contributions
- Identify the pay period. Use the annual, monthly or weekly assessment period used by payroll.
- Apply the relevant band. For 2026/27 standard qualifying earnings, use only pay between £6,240 and £50,270 annually, or the equivalent £520–£4,189 monthly or £120–£967 weekly limits.
- Apply the rates. Multiply the resulting slice by 3% for the minimum employer amount and 5% for the standard employee amount.
- Check the scheme rules. Confirm whether the scheme uses another pensionable-pay definition, a higher employer rate or a different assessment method.
- Read the payslip and pension statement together. Tax relief and payroll timing can make the amount deducted from pay look different from the gross employee contribution credited to the pension.
Worked illustration
Suppose a scheme’s relevant annual qualifying-earnings slice is £30,000 after its band and rules have been applied. The minimum employer amount is £30,000 × 3% = £900. The standard employee amount is £30,000 × 5% = £1,500. Together, £2,400 is credited before considering how employee tax relief is displayed. This is arithmetic using the statutory rates, not a promise that every employer calculates contributions on an annual basis or uses exactly the same pay definition.
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Automatic-enrolment eligibility depends on the worker’s circumstances as well as pay, so the qualifying-earnings band is not, by itself, a complete eligibility test. Employers must automatically enrol eligible staff and contribute to their pensions.
A worker who is not required to be automatically enrolled can still ask to join. GOV.UK states that the employer cannot refuse the request, although an employer may not have to contribute where earnings are at or below £520 a month, £120 a week or £480 over four weeks. The correct outcome depends on the worker’s category and the scheme rules; do not treat one earnings figure as a universal eligibility trigger.
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Postponement
An employer can delay automatic enrolment for up to three months. It must tell the worker in writing and allow the worker to join earlier on request. If enrolment is postponed, ask when the first assessment will occur and how the first contribution will be collected.
Information the employer must provide
When an employee is automatically enrolled, the employer must write to them with the enrolment date, the pension scheme being used, and the amounts the employer and employee will pay. The employer cannot pressure or force staff to opt out, or treat someone unfairly for remaining enrolled.
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Opting out is a formal process using the scheme’s opt-out notice; simply stopping a direct-debit or telling a manager is not the same thing. An eligible worker who opts out can rejoin at least once in each 12-month period. Eligible workers who remain opted out must be automatically re-enrolled at least every three years, after which they can opt out again if they choose.
Check the dates and refund rules in the notice. Contributions already deducted during the permitted opt-out window are handled under the scheme’s process; leaving later normally means preserving the pension rather than receiving an automatic refund.
How tax relief changes what employees see
The 5% employee figure describes the standard contribution share, but the route used to give tax relief affects the amount shown on a payslip and the amount the provider receives.
Relief at source
The employee pays a net amount to the pension provider. The provider claims basic-rate tax relief from HM Revenue & Customs and adds it to the pension. GOV.UK gives an illustrative example in which £40 from the employee, £30 from the employer and £10 of tax relief produce £80 in the pension. That example demonstrates the mechanism; it is not the automatic-enrolment minimum split.
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A non-taxpayer can still receive an additional payment under relief at source, subject to the applicable rules. A higher- or additional-rate taxpayer in a relief-at-source scheme may need to claim further relief through Self Assessment. The exact treatment depends on tax status and current HMRC procedures.
Net pay
Payroll deducts the pension contribution before calculating Income Tax. The employee’s taxable pay is therefore reduced through payroll rather than by a provider claiming relief afterward. The Pensions Regulator notes that the two methods can affect lower- and higher-paid workers differently.
HMRC has announced top-up payments for some non-taxpayers using net-pay arrangements, beginning in 2026 for contributions made in the 2024/25 tax year. Because the administration is changing, confirm the current process with HMRC, the scheme or a tax adviser before relying on a particular adjustment.
How to identify your method
Look for wording such as “net pay” or “relief at source” in scheme documents, the member portal or payroll information. If it is unclear, ask payroll whether the contribution is taken before tax, or whether the provider adds basic-rate relief after the deduction.
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Salary sacrifice: a separate payroll agreement
With salary sacrifice, an employee agrees to give up part of contractual salary and the employer pays that amount into the pension. GOV.UK says this may reduce Income Tax and National Insurance in some circumstances. The result depends on pay, tax position, benefits and the employer’s arrangement; it is not a guaranteed saving for every employee.
Salary sacrifice is not the same as relief at source or net pay. It does not automatically change the legal employer minimum, and it can affect calculations linked to salary, such as statutory payments or borrowing assessments. Read the written agreement and ask how the employer protects pensionable salary, bonuses and other benefits before signing.
Payment deadlines and what happens when money is late
When employee contributions are deducted from pay, they generally must reach the pension scheme by the 22nd of the following month. If the employer pays by cheque, the general deadline is the 19th of the following month. The employer must also follow the payment schedule agreed with the pension provider, which can be earlier or more specific for a particular payroll cycle.
Missed or late contributions must be backdated. The Pensions Regulator can fine an employer for late payment, and persistent failures can lead to further enforcement. Employees who see a deduction on their payslip but no corresponding pension credit should raise it promptly with payroll, then contact the provider and the regulator’s dispute or reporting channels if it is not corrected.
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Some schemes allow the first three months’ contributions to be paid together by the 22nd of the fourth month. This is not an automatic entitlement for every scheme: the employer should confirm the arrangement with its provider and tell staff how the first payment will appear.
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What employers need to put in place
- Choose and document the basis. Record whether the scheme uses qualifying earnings or its own pensionable-pay definition, and whether rates exceed the statutory minimum.
- Set up payroll correctly. Include relevant salary, commission, bonuses, overtime and specified statutory payments where the scheme rules require them.
- Check tax-relief operation. Confirm whether the scheme uses relief at source or net pay and communicate the effect to staff.
- Agree payment dates. Align each payroll run with the provider’s schedule while observing the legal 22nd or 19th deadlines.
- Reconcile deductions. Match payroll deductions, employer payments and provider receipts every cycle.
- Use compatible software. Automatic-enrolment payroll software may calculate deductions and enrolment tasks, but the employer should verify compatibility with the chosen scheme.
- Review scheme quality. Compare charges, member support, service levels, tax-relief method and payroll compatibility before selecting or changing a scheme.
Common mistakes and how to correct them
Applying 8% to every pound of salary
The standard calculation applies 8% to the qualifying-earnings slice, not automatically to all gross pay. Recalculate using the correct band or the scheme’s stated pensionable-pay basis.
Treating the 3%/5% split as universal
The split is the statutory minimum on the standard basis. A contract or scheme can require a higher employer contribution, a higher employee contribution or a different pay definition. Check the scheme booklet and employment terms.
Confusing eligibility thresholds with contribution bands
The earnings figures used to assess automatic-enrolment status are not interchangeable with the qualifying-earnings band. Confirm the worker category, age and circumstances as well as pay.
Assuming tax relief is visible as a separate payment
Relief at source and net pay show relief differently. Ask which method applies before concluding that the deduction or pension credit is wrong.
Missing a provider deadline
A payroll run that meets an internal date can still be late under the legal deadline or the provider’s schedule. Set a reconciliation control after every payment and investigate any unmatched deduction.
Questions to ask payroll or the pension provider
- Which pay definition is used: qualifying earnings or another pensionable-pay definition?
- What are the employer and employee rates, and does the employer pay above 3%?
- Are commission, bonuses, overtime and statutory payments included?
- Is tax relief provided through relief at source or net pay?
- What date will deductions reach the scheme, and how are corrections handled?
- How does salary sacrifice affect pensionable pay and other salary-linked benefits?
- What are the scheme’s member charges and support arrangements?
Sources and scope
This explanation applies to UK workplace pensions and the 2026/27 tax year. It is based on current guidance from The Pensions Regulator and GOV.UK, including “Making contributions to your pension scheme”, “Set up and manage a workplace pension scheme”, “What you, your employer and the government pay”, “Workplace pensions – what your employer can and cannot do” and “What to look for in a pension scheme”. Rules, thresholds and HMRC administration can change, so use the figures for the stated tax year and verify later-year amounts.
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